BSA: We don't advocate cloud use for piracy reduction

Saying it was too early to tell if it is affecting piracy rates in countries around the world, a BSA (Business Software Alliance) executive said Tuesday they are not advocating the use of the cloud as a means to curb piracy incidents worldwide.

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Saying it was too early to tell if it is affecting piracy rates in countries around the world, a BSA (Business Software Alliance) executive said Tuesday they are not advocating the use of the cloud as a means to curb piracy incidents worldwide.

"It's not yet a widely used technology," remarked Roland Chan, senior director for marketing, Asia Pacific, BSA. "It's too early to predict if it has a downward pull on [software] piracy."

The BSA is a trade group of software industry players with more than 30 member companies worldwide, including the likes of Apple, Microsoft, Adobe, and Autodesk.

Their foremost goals, aside from advancing the interests of the industry, include crafting policies that affect the industry and curbing the use of unlicensed software worldwide.

In its anti-piracy efforts, Chan said they do not advocate one type of software over the other, hence the reluctance to declare the cloud as a potent alternative against piracy. "In software deployment, companies must measure the total cost of ownership. In open source and cloud software, at least 90% of costs can come from support and maintenance alone," he explained.

He advised firms to do their research and make an informed decision on the best alternatives based on that research.

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Piracy's Economic Impacts

Regardless of alternatives available to end-users, most still prefer to use pirated software within their organisations.

The current piracy rate in the country, in fact, has remained at a constant 69% over the course of three years, according to BSA reports.

Chan said firms--as well as governments--must realise the impact of pirated software use not only to software vendors, but to the country's economy as well.

"The software industry contributes to the economy by more than just selling software," he emphasised. "The business of selling, servicing, and supporting software is also considered as a downstream economic activity."

In turn, software development creates a "ripple effect" that "increases IT spend, creates good, high-wage, high-skilled jobs, and contributes to the government's revenue," Chan added.

A recent BSA study in partnership with research firm IDC in fact suggests that a 10-point decline in a country's piracy rate results in as much as 500,000 new high-tech jobs, US$142 billion in new economic activity, and $32 billion in new tax revenues.

This is in stark contrast to the losses accrued due to software piracy in 42 countries included in the BSA-IDC study. Software piracy is valued in these nations at $45 billion, but the total losses due to its persistence amounts to as much as $110 billion.

"More than 80% of the benefits [from curbing piracy] accrue to local economies, because software firms hire local people, sell to local distributors, and their products are bought by local people. It doesn't all go to the principals," the BSA executive pointed out.

In the Philippines, a 10-point drop in piracy rates over the course of four years can translate to 1,097 new jobs, $329 million addition to GDP, and $30 million additional tax revenues.

But Chan was quick to note that if that rate of reduction is accelerated over two years, an additional $107 million in GDP revenues can be had, as well as a $9 million increase in tax revenues.

"The lesson here is that the quicker [countries] bring down piracy rates, the more there is to gain today," Chan quipped, adding that the study further reinforces the need to reduce piracy.

Bien Marquez, the BSA consultant for the Philippines, reiterated Chan's point. "There really are benefits if software piracy is decreased. There are VAT (Value Added Taxes) and local taxes for software. When pirated software is used, the taxes are not realised by the government," he emphasised.

Marquez said they will work with the Department of Finance and the Bureau of Internal Revenue more closely by next year to hammer the point of economical gains for bringing software piracy rates down in the country.

"The government and the private sector have a lot to do to see these gains," Chan added.